Tag: China

Slush Shanghai 2019 was a grand celebration of global tech and startups. It got me thinking about standing out as a tech conference.

I have a conflicting opinion of such events. They allow thousands of people to hear cool topics directly from thought leaders. And at the same time, they create the hope for dozens of startups that they’ll get noticed by media and investors. As a community builder and somebody generally in touch with the latest ideas and robust network, tech conferences don’t create something unique.

The Chinese’s innovation landscape is a complex adaptive system, moving at full speed. This idea doesn’t please delegations that visit us from around the world. They come to Shanghai, hoping to form an opinion on the growing presence of Chinese startup news in their media. While we wish we had a clear and marketable story to share, this is the closest thing I found.

Who hasn’t heard about the podcasting trend yet?We can say that Podcasting is a lot more than a trend, considering that there are 700K free podcasts available. The average weekly consumption for Americans adult is 6 hours and 37 minutes as per this article on a16z. While I doubt that Chinese listeners are as passionate (short videos are the thing in China), I can see how many community leaders and KOL have started interviewing people and recording their opinions.

We also tried something with Upstart, and I’m looking into ways to get it off the ground once again. Over the coming months, there will be more interviews from local entrepreneurs and ecosystem builders.

From time to time, I have a chance to get interviewed and share some of my thoughts and stories. A recent one got published on En Eclaireur (in French) and the latest one has been with ChinaBusinessCast.

China Business Cast’s goal “is to help entrepreneurs who want to learn how to do business in China. The podcast features conversations with experienced entrepreneurs and business people who’ve built their businesses in China.” I met Jons a few years ago at a Startup Weekend in Chengdu and got to see him again at TECOM earlier this year. That was an excellent opportunity to join his show and talk about “Entrepreneurship, Accelerators, and Unicorns in China.”

That episode was recorded when I was still with Techstars (since then, I transitioned to XNode) but the content is still very much relevant. Beside some observations, it got me thinking about the way we perceive innovation in China. And how, as a global ecosystem player, we used to share it.

Working in the innovation field in China means receiving an unusually high amount of requests to partner up. Over the past four years, I came to dread receiving a message with the words “collaboration,” “partnerships,” and “let’s sign an MOU.” While it is most definitely half my own mistake, I don’t recall any actual outcomes from sealed partnerships. The chances to fail are even higher if we’ve never met the counterpart in real life or done work together before. And if there is no cash exchanged one way or the other, the odds are indeed against this collaboration’s success.

So why would people reach out and sign MOU? I sometimes assume that people might collect paperwork and pictures with smiles or handshakes on them. It probably keeps them busy.

In a way, though, there is an opportunity to bring two organizations together to deliver something more significant than each could execute separately. But to make this correctly, the process has to be monitored carefully. And several best practices served me well to avoid too much waste of time.

All it takes is a bit of discipline.

Push back on signing documents

First, best refuse to sign any document if there’s no cash or a short-term client available. Instead, suggest waiting until one of this two scenario happens. That has always helped set the serious partnerships apart from the PR-focused ones. That won’t make everybody happy and satisfied, but it is well worth the trouble. And if you’re like me, reading a legal document is something we gladly skip. In China, the only exception could be with government bodies. They wouldn’t concretely lead to sponsorship or client work, but they are worth the attention in the long run.

Build a system

Second, create a system that is reliable and complete. I rely on tools to scale my action, and managing partnerships is a great opportunity to leverage digital services. My choice this time is with Notion.so and its database system. It is seamless (and free for the lowest tier) to create a Workspace, then a Page, and then create the View that suits your needs. In this case, the “Table View” works fine to prepare and maintain a long list.

At this stage, the fields (called “Properties” in Notion) that have been useful are:

Title of the organization

Status (Lead / Contacted / Active / Passive / Lost)

Internal point of contact (from your side)

Name of partner’s contact (from their side)

High Priority (y/n)

Last Activity (date)

Title Last Activity (short description)

Notion is built in a way that you may add as many Properties as you’d like. But it’ll be as many fields to fill in and keep up to date. It’s a balance to find and test.

Notion is built in a way that you may add as many Properties as you’d like. But it’ll be as many fields to fill in and keep up to date. It’s a balance to find and test.

Start fillin’!

Third, you may want to start adding the partners that are on top of your head. But I usually don’t worry too much and instead wait for a new touch point. Doing it step by step rather than in one go is less overwhelming admin-wise. Similarly, it’s essential to update the Table regularly rather than waiting for the backlog to get longer. Remind yourself to take a look at it every couple of days, 5 minutes once in a while will be worth the time. Plus, looking at the list can give you some new ideas with opportunities to reach out.

Don’t drop the ball

Finally, have the discipline to reach out to your partners every quarter or so pro-actively. Pinging them will go a long way and it could create some interesting conversations. It is for that reason that I keep the Property “Last Activity” well up to date. Whenever I have 15 minutes, and I see that I’m falling behind on partnerships, I will send a gentle nudge. Even if we weren’t the ones creating that collaboration, it is warmly appreciated – and a good signal of excellent customer service.

Some organization and light touch discipline – managing partnerships isn’t so hard after all. And instead of being frustrated by a handful of unsuccessful ones, we can scale this system while keeping it close to our attention.

My fellow Carnet.cc author Vincent accepted to endure a live recording with questions on his experience in manufacturing in China. We’ve had long discussions over the past few years, always very lively. I am so glad that we could seat behind the mic and record 45 minutes of hands on content.

Feel free to listen to the recording on Anchor.fm, Spotify and Apple Podcasts) or read the transcription. Any questions? Comment at the end of the post.

Vincent, please introduce yourself

I am one of the partners at Pinn.hk. We are a product development studio located in Hong Kong. We are mainly developing products for our owns brands Huzi and Infinity Pillow, toys and travel accessories. We design, manufacture, and sell online. I have been in Hong Kong for the past eight years, and I have been enjoying life there so far!

Where do you find a good manufacturer to prototype your product?

That’s the tricky one! It is about understanding what the product requires in terms of expertise. We run the first round of due diligence based on skills needed – most often through recommendations.

For our simpler products, we’d look broadly, via traditional sourcing channels. We attend fairs and exhibitions – meeting with manufacturers that show up. We’ll follow up on these contacts as projects start coming up.We then contact them, trying to understand if the description matches. That helps us shortlist the one we’ll be visiting on-site. We mainly work with factories from the Guangdong area, so it’s an easy day-trip there.

What are the key considerations when selecting manufacturers?

There can be some particular production skills required. Picking a manufacturer that wants to learn from us helped find a win-win situation.We are on a premium segment, with high-quality requirements, often stronger than most companies. Some factories (especially in the Guangdong area) are interested in improving their processes to avoid manufacturing cheap things only. The prospect of working with brands like us is appealing to them!That gives us the confidence that we can build a stronger relationship with them. Helpful in urgent situations.

Other benefits that the manufacturer might perceive from working with you?

It is a case by case basis. One might be interested to learn about great design. Another one might want to improve their processes based on our experience together. We can also use our experience of selling with online platforms to justify working with us; there is a lot to learn here.

What are the milestones to have with the factory?

As a project grows in complexity, we will validate the costing and technical elements. A pre-production test would typically happen shortly after. It helps us make sure that both parties well define everything from pricing to small details.

Are manufacturers more willing to work on small batches of production?

Ultimately, manufacturers want big orders; they want to keep their production units going. Lower quantities can work if products and tooling requirements match. We’ve worked with hard and soft products – each requires different methods. With soft products, you can order fewer pieces because it often doesn’t need new toolings. In practice, small quantity orders will end up at the end of the schedule, at the bottom of their priorities.

Then, if it’s more interesting for you to produce in bulk, how do you deal with production and forecasting your orders?

Large companies have tools and a history of sales to help them forecasting orders a long time in advance. It’s not perfect, but that gets the job done.
For us, we try to scrap information on small trends. We are carefully looking and anticipating where markets might go up or down. It’s not rare to end up with too much or too little stocks. Someone in this industry for long would end up stocking a little more than ideal, to be safe.

What are the typical minimum order quantities?

For our products requiring specific toolings, we would have troubles finding a factory in Guangdong willing to work for less than 1,000 pieces.
For soft products, it’d depend on the fabric you need – some have high minimum order quantities – but you can negotiate down to three hundred pieces.
Beware, it might not be about the manufacturer; you need to look at the entire chain. If you have to order a part that has a much higher minimum order quantity, you can rapidly get stuck on really high numbers.

How did you learn what you know now about the industry

Mainly experience.
You can learn from theories and reading books, but you need to experiment. Most learnings come from each opportunity. Every batch you run will provide another round of insights. Over the years, you’d hope to get better at it.
After some many bruises though, you’d want to remain agile and not get overwhelmed by processes – that’s often a false sense of protection or security. The goal is to find a balance that you’re comfortable with.

Can you describe how the supply chain of a product manufactured and sold in China would work?

China is not one of our primary market for expansion. We don’t have something specific for the country. Typically, if you produce and sell in China, you have to pay the sales tax early.
The scheme that most international brands use is to export a product immediately upon production completion, hence avoiding to pay sales taxes. We stock up in Hong Kong and ship orders from our warehouse there.
So let’s say, somebody in Mainland China purchased one of our product, we’d ship it from Hong Kong rather than from our factories. In that scenario, the customer pays the sales taxes.

Some factories can help you set up the sales tax part, but it requires additional controls. Taobao and JD.com have global solutions as well, assisting foreign brands in selling products on the Chinese market.

Who are the stakeholders involved in this process?

You can get help from designing firms, a certification agency to validate products, import and export licenses, distribution channels, and then the marketing and PR support.
We’ve realized that manufacturing the product is just a part of the overall process. And it’s not because your product is available on Amazon that you’ll get it purchased. You want to outline and execute a marketing and PR strategy. That might require some additional support.

How do you compare Tmall and JD.com systems with the Amazon warehouses systems?

Selling in China is a lot more complicated. In that regard, dealing with Amazon is more straightforward, more open.
But it is not all rosy, Amazon still considers that most sellers out of Hong Kong speak Mandarin, they wouldn’t try English or Cantonese with you. Nonetheless, they can do wonders to support your logistics needs. They have a license to do ocean freights, which means that they can pick up your products directly from your factories in China.
Picture a well-integrated process from the manufacturers to the end customer.

On the other hand, for a foreigner to sell in China without a base in the country – there’s no equivalent to Amazon. Tmall global exists, but it isn’t broadly used yet, partly due to an invitation-only system.
Without an entity in China, the seller will have to fulfill the order and be pretty much on their own.

A few years ago, we discussed Amazon supporting customers to send products back. In general, the fact that it has a lot of power over its sellers. Do you feel that the Chinese platforms have the same angle or will support sellers a lot more?

Well, in China, you do have the seven days return policies. But this is more restricted than the 30 days of Amazon.
The significant difference might be down to customer habits. American consumers are a lot more used to returning products. One might order every color of an item and return all of them but one, the favorite one. That’s not very common in other market places.

You’ve used Kickstart several times to launch a product – what’s your opinion on the platform?

Many exciting projects are happening on Kickstarter, and it’s still a great way to validate a product’s potential. If you don’t have a lot of money to invest, it can help you test if you’re heading in the right direction.
But there are also many stories of how some people took advantage of the platform. So in many ways, you have to do your due diligence and understand if using Kickstarter will have real benefits for you.

For example, some websites don’t publish news about the on-going Kickstarter campaign because of the high failure rate in the execution and shipping phases. That might hurt your PR strategy.

How do you get your product into your customers’ hands when you don’t sell via Amazon?

We leverage fulfillment centers. We work with a center in Hong Kong and the US plus considering one in Europe. It’s effortless to find providers allowing you to outsource most of the worries associated with fulfillment.

There are two types of fulfillment centers for us: the B2Cs, that are connected to our selling platforms via an API and would ship an order as soon as it’s settled.
The B2B warehouses that will specialize in much larger volumes. Typically getting palettes for retailers and wholesalers.

How much time do you spend on reviewing that system that you put in place?

Roughly every quarter or semester, we review and make sure it is supporting our needs. We will also look into customer feedbacks as a way to anticipate updates to be made.
For example, Germany recently changed its customs policy: customs are getting paid on every single item arriving in the country.

With Amazon, things used to be in a grey area where the platform nor the seller were including taxes. Many countries have since changed their policies and made it mandatory for the platform to collect taxes on behalf of the seller. Things are now a lot clearer.

We are officially registered with the German VAT system, but postal services don’t offer “Delivery Duty Paid” services. It requires a specific courier that makes the total price expensive in comparison to the product’s value. That forced us (and many other sellers) to look into different fulfillment methods.

Have you considered stopping to sell in Germany altogether?

Not really, what we did is indicating at the time of checkout that our products were shipped from Hong Kong, hence inquiring additional fees.
But we are looking at alternatives that would allow sending the product from Europe (hence making shipment quicker). The strange situation that we’ve encountered is that shipping from Hong Kong to Europe is significantly cheaper than from Europe to Europe.
And currently, it’s just a few days faster to ship within Europe compared to from HK to EU. Look at a map, and you’ll see that it’s crazy!

How are you charging Mainland Chinese customers and which platforms you’re using?

I can share some of my experience, but I’m also looking for suggestions on a great setup! Right now, we charge Mainland Chinese customers with Alipay (via Stripe). But it’s only in Hong Kong, so customers would need to be ok with paying in a different currency (HKD).
We found that it was more convenient for them than paying with a credit card in USD.
WeChat is not correctly set up on Stripe, so we haven’t offered this option yet.

You can’t charge in RMB if you don’t run operations in Mainland China.

But then it means that your Chinese customers need to do that extra work: getting to your website and being willing to pay in HKD.

The conversion in Alipay from RMB to HKD is simplified, so it doesn’t require much effort from them. But it’s less than ideal.
It’ll be the same if you want to sell on Tmall, Taobao or else, you got to have a business set up officially in China.

Have you looked into setting up in China? What would be your typical channels of distribution?

We are looking into this. Several leading online stores cover the vast majority of the market. If you have a presence on Taobao, JD.com, Xiaomi, Sunning, and several more, you cover 90% of the e-commerce market in China. That’s unheard of in most countries.

What we found is that having a presence on these platforms require a tremendous amount of human resources. Your customers reach out to you at any time, and they expect immediate replies. The challenge that we’re facing is finding the right partner willing to commit to our highest standards of quality.

What would be other adjustments to be made if you wanted to sell on Chinese platforms?

There are more and more Chinese entrepreneurs looking for brands that they can develop in China. They believe in leveraging the massive size of the market to justify bringing prices down massively.
That poses a fundamental question to us:

Some brands have different pricing strategies for Western markets versus China, where it’d be substantially cheaper. We aren’t comfortable with this strategy.

We make sure that our brand is consistent worldwide, pricing and customer service wise. That might come at the expense of not moving on a popular platform.

What are the top reasons to sell on Taobao or JD.com compared to setting up your own WeChat store?

It’ll be the same situations as posed by Amazon: “the bottom line is the reach of these platforms.”
Customers want to find what they seek. It’s not about your opinion as a seller on the platform. You got to leverage the best places to sell your products.
With a larger market share, you hope to leverage new business opportunities, develop new products, increase the quality, and more.
It means making your own informed decisions – being independent is a lonely path.

Would you say Chinese customers value “China-made” products?

On our segments of products, it doesn’t make a difference as far as we’re concerned. We design and manufacture in China, and we haven’t seen an impact. But it is plausible that our niche market has specific desires and expectations.
Our Chinese customers are mostly in first-tier cities. Most definitely households who have been over the purchasing-craze and are now looking at few but thoughtful purchases. It’s unclear if they pay a lot of attention to Design/Made in China.

Have you considered manufacturing elsewhere than China and possibly in Europe and the US?

Not really, we take pride in the work we do from China. It is a clear advantage to work with factories close to us. We don’t produce in China because it is the cheapest option, we produce in China because we live here and found everything required to be successful.

So Marian, can you please introduce yourself first?

My name is Marian, the founder of weHustle. I came to China seven years ago, first in a city close to Beijing and then in Shanghai, three years later. Not knowing people in town, I started attending many events around entrepreneurship including Startup Weekend. Over time, I understood that entrepreneurship is my passion. I wanted to know more. Doubling down on attending events, I got so inspired and excited by the startup ecosystem with events, pitches, and founders, that I decided to start my own company. That’s how weHustle got founded. It’s been three years now, and we work with many tech communities, startups, and founders. I’m looking forward to what’s ahead of us in the future.

Why did you start working on WeHustle? What was the pain point you tried to address? Why were you the person to solve it?

Initially, the company was called China Classifieds. Back then, I was sitting in my office, working for another company. And as a big fan of Kickstarter, I would order and support many projects on the platform. One that stood up was a USD 9 computer chip that I purchased. But to use it, you needed a monitor. For a USD 9 computer, I didn’t want to buy something new. Now, I’m from Ukraine, a place where you can easily find second-hand websites and buy cheap stuff for fun. I couldn’t find something similar here in Shanghai, and I thought to myself that many other people were probably facing the same challenge. That’s how China Classifieds got started. We added various categories such as apartments, jobs, event listings, and more. Somehow, it didn’t work with the audience, and they couldn’t see the value in China Classifieds to the point where they’d use it all the time. Plus, it was tough to push the strategy in different directions to test new markets fast. And people were confused about the concept itself – whether it was to find apartments, jobs, a platform for communities – it wasn’t clear. As my real passion was around entrepreneurship and innovation, we decided to narrow down our categories and simply keep “jobs” and “events.” We changed the name to weHustle to reflect the new direction, and we now have a platform that connects innovators from the region.

How is it going so far? What was the response from the community?

As we announced the rebranding, we got surprised by the number of positive feedback from people. So many private messages were telling us how they love the new name and positioning. Doing it was a smart move. Also, people associate weHustle with WeWork, so it helps me market the product. The word “hustle” itself is very trendy and a hot topic, for example, with Gary Vee talks or people fighting against the concept. So we can see many conversations around it, helping us get visibility. Plus, it’s way shorter than China Classifieds, so people remember our new name more easily. And since the rebranding, we’ve seen many companies that didn’t use our service under China Classifieds, now more willing to try our platform.

How do you see the evolution of that platform considering that now you have more user engagement?

As we have more user engagement, we can track how many people apply for jobs, how many people post events. The number is increasing. Now, we’re trying to create more sophisticated ways to track and to retain people on the platform.
So far, it goes well. We have some crazy ideas that we are working on right now, and that will help engage visitors.

If you had to boil down the business plan into a general concept, what is weHustle in a few words?

“weHustle is a recruitment platform with the community.”

How do you nurture this community? How do you make sure that it exists and helps you compete with alternatives?

We don’t say that we have “our community.” Instead, we work with many other existing groups like Slush, Startup Grind, AngelHack, Ladies Who Tech, Chinaccelerator, and Technode. These communities have their circles with active followers and events. We channel their and our activities in one place. So by following weHustle, people can stay up to date with the broad spectrum of upcoming events from different communities. In this way, we share an audience passionate about innovation, entrepreneurship, and technology. And that aggregated community is the audience that companies, startups, and organizations would like to get in touch to find talents, partners, co-founders, or clients.

Have you identified any differences with the Shanghai tech ecosystem? Is there something that stands out?

The Shanghai community is very dynamic, well engaged, and international. Shanghai has it all, communities such as Google Developer Group which has localized their content and attracts local geeks. Startup Grind which is also global but hasn’t localized that much and many foreigners and locals alike attending their events.

How do you see the future of tech and entrepreneurship in Shanghai?

Shanghai is growing very fast. There are more and more global communities entering China with Shanghai as the first landing pad. It is easy to test a model, adapt and then replicate in more cities. That’s the case with Le Wagon: they’ve been here in China just for a couple of years. Shanghai was their first city, and now they have a presence in Chengdu and more recently in Shenzhen. The same happened to Angelhack, we did three successful hackathons last year in big cities, and now we’re moving to other provinces.

How do you see your involvement as a volunteer for AngelHack and Startup Grind benefiting yourself, and weHustle?

First of all, I don’t see community building and engagement as a direct source of benefits. That’s the wrong attitude. Instead, join the community because you feel the passion and you like its mission. Once you invest more time and efforts in it, you’ll harvest some benefits in return. What you get is access to vast networking, you learn a lot from your teammates and speakers. For me, it helped a lot getting inbound connections such as: “I’ve seen you at Startup Grind, I have some questions…” and then we start a conversation.

We typically associate Startup Grind with inspiring the next generation of entrepreneurs and AngelHack as a way to put in practice what you’ve learned.
Have you have you considered what would happen afterward for your participants? What are they supposed to do in Shanghai? What are the suitable solutions for them?

What we see are two options:

Work for big corporations. For example, running incubators, corporate innovation programs, or building bridges with local startups.

Create your startup;
Once you get inspired and motivated at events, you start your project with good connections and some knowledge obtained.

Last month, you announced TECOM to the world! Can you share why you considered starting a conference for community builders?

I’ve been following many of conferences recently, including RISE, Slush, TechCrunch, etc. And what I saw were VCs, startups, and pitches. After the event, you can tell that people were excited but didn’t get enough follow up. Sometimes, even if you have pitched to investors at the conference, you wouldn’t get the return on your time invested.
We have been working with many communities for a few years. We see that they provide a lot of support and value to startups and help grow the whole ecosystem. Why not put a conference for them?
I believe that a community should be the pillars on which startups can grow.
If you go to a smaller city like Suzhou or Hangzhou, you can’t find that many communities where to pitch your project or talk with peers.

I want to use TECOM to bring most communities under one roof and showcase their values, missions, and how they help the next generation. We will also talk about their impact, their challenges, their focus, and so much more. It will also allow communities to know and talk with each other. It will enable new people to join these groups, and we can foster best practices sharing among different community builders. For example, we will have one panel with four organizations that started here in Shanghai. They are small but are building a stronger presence quickly. They can learn from larger communities and can follow some of the steps.

Can you share some of the of the activities that will be taking place during TECOM?

TECOM is a day-long event, on March 23rd.
It has a main stage with over 30 confirmed speakers. There will be keynotes – deep dives – and two panels.
We will host three workshops:

One run by a digital marketing agency 31Ten to help community builders refine their WeChat strategy and how to leverage it to full potential when it comes to marketing events on WeChat.

Another one from Qalista that will focus on how to make your pitch interview with employers better. That’s for job seekers.

The third workshop will be run by nihub for startups to raise funds and improve their pitch.

TECOM will host the Digital Talent Job Fair. It feels important to support the best people that are looking for new opportunities. We are bringing 40 companies to exhibit their job openings. We will also have a Community Alley where the general public can find more information about participating tech and entrepreneur communities.

Why should somebody join TECOM?

If you want to know what’s happening within the tech and entrepreneurship ecosystem in town;
if you’re a community builder;
if you’re looking for a new job opportunity;
if you’re an innovator or entrepreneur, then you should join TECOM.

What did you like the most about creating TECOM?

My best moments are hearing “yes” replies from companies and communities once you’ve reached out to them. You pitch the idea, and they love it! Then you start building the schedule, confirming speakers, lining up partners – that’s another beautiful moment to reflect how you’re making something that didn’t exist before. It is now coming to life!

Were you surprised during the journey of organizing TECOM?

Yes, if we take the example of my conversation with Feiyue after reaching out to them. I was pitching the idea around TECOM and bringing the communities together, gathering motivated, international people together. They agreed to co-brand their shoes with us, and we’ll have awesome Feiyue x TECOM shoes for volunteers and teams. What a big surprise!

What’s your ambition with TECOM?

2019 is our first year, so it’s hard to know what will happen next, but the idea is to bring TECOM to different cities and make it a yearly conference. In this way, we can facilitate and strengthen the startup ecosystem in various cities across China. By doing this, we help startups have more opportunities to grow. At the same time, I’d hope to get support from the government to make it larger.

You’ve partnered with large organizations, what do they hope to get out of their involvement with TECOM?

These big companies are trying to get into the startup community. But if they target startups one by one, they’ll waste a lot of time and resources in the process. The easiest way for them is, therefore, to work with the communities and us and leverage these connections to identify good startups.

I enjoy reading since I was young. First, reading science fiction and fantasy books — French ones that you never heard of. And as an undergrad student, reading business books was my thing. I saw each of them as a chance to accumulate some experience and opinion that I was lacking.